Are you a slave to convention?

RISK

Jerome Booth, head of research at Ashmore Investment Management, reveals the dangers of being a conservative, convention-bound investor during periods of big macro-economic changes.

The most productive slaves do not feel aggrieved at their position, but accept their lot in life. Investors can also be enslaved, not in chains but in conventional thinking. Self-delusion may be comforting. Mass self-delusion is not uncommon in history. Thinking is hard work, and people generally prefer not to if they have a reasonable excuse – like ‘everybody else does it that way’. We can define, for the purposes of argument here, a conservative investor as one who follows the line of least intellectual resistance and does what others do or what has worked in the past or elsewhere. ...